What’s new:

• Homescreen wallpapers
• Folder organization of the homescreen icons
• Multitasking and fast app switching
• Google/Wikipedia search in Spotlight
• Bluetooth keyboard pairing support
• SMS character counter
• SMS search
• Email threading
• Unified Email inbox
• Email archiving is now available when you setup Gmail
• Spell checker
• iPod music player can now create, edit and delete playlists
• 5x digital zoom in still camera
• Touch-focus in video capture (for video enabled iPhones)
• Keyboard layouts span over QWERTY, QWERTZ, and AZERTY
• Minor icon design facelifts
• Video call support (only in iPhone 4 and only over Wi-Fi)
• iBooks e-book and PDF reader

What’s still missing:

• No Flash support in the web browser
• No true multitasking for all applications
• iOS4 for iPhone 3G has limited new feature set
• Poor performance on iPhone 3G
• No quick toggles for Wi-Fi, Bluetooth or 3G
• No social networking integration
• No info widgets on lockscreen or homescreen
• SMS tones are still not customizable
• No mass mark emails as read
• No proper file browser or access to the file system
• No USB mass storage mode
• No vibration feedback when touching the screen
• No Bluetooth file transfers to other mobile phones
• Contacts lack a swipe-to-delete or mass delete feature
• No SMS/MMS delivery notifications
• No smart dialing (but Spotlight is a somewhat of a substitute)
• No DivX or XviD video support and no official third-party application to play that
• The whole iPhone is too dependent on iTunes – you cannot add the same type of content (video, photos, apps) to the phone from two computers, a regular file management interface would have been much better

Multitasking
Though you’ve always been able to multitask with native iPhone features like the music player, the option is now available for third-party apps. Your primary access point is a multitasking menu that’s accessible by double tapping the Home button. Once there, you’ll see a list of currently running applications along the bottom of the display that you can scroll through using a sideways finger swipe. The pop-up menu shows only four apps at a time, and we’re still investigating whether you’re limited as to how many apps you can open at once.

Managing the multitasking menu couldn’t be easier. To open a running app, scroll though the menu and tap its icon once. When you’re ready to end an app, first use a long press on the related icon and then click the tiny delete icon in the top left corner. Switching among apps is a simple process as well: As you move back and forth, you’ll return to the exact point you left.

But is it real multitasking?
As you’d expect, Apple’s multitasking works a little differently than on other smartphones. Instead of having all device resources available to every running app, iOS 4 lets only seven app services run in the background. These include audio (you’ll be able to play Pandora radio, for example), VoIP services like Skype, GPS/location for apps like TomTom, push notifications, local notifications (those that don’t to have to go through a server), task completion (users get an alert when a process is finished), and fast app switching (apps essentially hibernate to not use the CPU).

According to Apple, this arrangement will have less of a drain on resources like battery life and memory than if it gave developers free reign. Also, pausing most background apps will free the system from having to juggle resources and kill stalled applications.

Though some have complained that the built-in limitations mean that iOS 4 doesn’t have “real” multitasking, we think “incomplete” is a better description. Granted, you can’t run everything in the background, but iOS 4 does allow you to run certain features from multiple apps simultaneously. If that isn’t multitasking, then we don’t know what is. What’s more, it wouldn’t be the first time Apple limited features or took longer with development in order to produce a desired customer experience. You may not agree with such a philosophy, but Apple has always been honest about pursuing it. Like with so many other things in technology, it comes down to what works best for you.

Nice, but not miles ahead
On the whole, we were quite pleased with the multitasking experience. As it has a talent for doing, Apple has presented the feature in a slick, easy-to-use manner. It performed beautifully without ever crashing or freezing the phone; it didn’t appear to negatively affect our iPhone 3G’s battery (we’ll follow up with more-thorough testing in that regard once we get an iPhone 4); and it accomplishes what it sets out do. But even with strong points, we wouldn’t agree that it’s the “the best” way to multitask (a common Apple claim). It may save you a few clicks, but other approaches–such as the “deck of cards” interface on webOS–continue to impress. Similarly, though limited multitasking may result in more-efficient power management, we’ll have to run comparison testing with other smartphones before we can agree.

We also don’t share CEO Steve Jobs’ view that Apple’s solution isn’t a task manager. When he unveiled iOS 4 in April, Jobs took a dig at Android and other operating systems that require you to close background applications that might be slowing down the phone. “In multitasking, if you see a task manager… they blew it,” he said. “Users shouldn’t ever have to think about it.” Fair enough, but we think it’s a matter of semantics. As with most task managers, the iOS 4 multitasking menu allows you to scan through running applications and close any that you’re no longer using. Granted, you may not have to kill frozen applications as often as you would on, say, a Windows Mobile phone, but you still have that option. We also found usability quirks that are common with task manager apps. Pressing the Home button once, for example, simply sends an app to the background; it does not end it completely. To do so, you’ll need to open the multitasking menu, find the related icon, and end it there.

Home screen folders
Though we love apps as much as the next person, we’ve become tired of scrolling through several pages of iPhone home screens. Thankfully, that has changed with the addition of home screen folders. This is another common feature that competing devices have long offered, so it’s nice to see Apple stepping up.

To get started, use a long press on the home screen so the icons “jiggle.” When your icons are dancing (they’ll also have a tiny delete icon in the corner) you can take an app and drop it on top of another to create a folder. The folder will then appear as a square with tiny icons of the included app inside. Tap the folder to access the included apps and get an expanded view of the folder’s contents. Alternatively, if you want to remove an app, just drag it back to the home screen.

Thankfully, you’re awarded a fair amount of flexibility for folder organization. You can add as many folders as you like, change the default folder name, and add both related and unrelated apps. Surprisingly, we could even group legacy features like the Weather and Stock applications into a single folder. The process is easy, though we wouldn’t say it offers a huge change from the equivalent experience on Android. And really, Apple, we’re limited to just 12 apps in one folder?

Email changes
Though the iPhone always has been a functional email machine, we never enjoyed switching back and forth among multiple accounts to read new messages. Fortunately, iOS 4 has a new unified inbox that is accessible under the “Mail” option on your home screen. Listed above your individual inboxes is a new option for “All inboxes,” which contains messages from multiple accounts. You can’t access individual folders from the universal inbox, but you can delete and move messages. Here again, it works well, but it’s not vastly superior to how competing OSes handle the same process.

Other email changes include the capability to add multiple Exchange accounts, organize emails by thread, jump directly to individual inboxes, and open attachments with a preferred app. All are nice, but we’ll delve into a couple of our favorites for more detail. Emails in a thread will now be designated by a small number on the left side of the message header. Clicking the number will take you to a separate screen that lists all relevant messages. It’s a nice touch, and we like that you can move or delete messages in the thread. We also like the new option to delete emails directly from search results.

Home screen customization
Unlike the previous three features, this change was low on our wish list, but Apple’s done a decent job rolling it out. Sure, you always could change the standard black background using a third-party app, but iOS 4 adds the native capability to the iPhone and iPod touch. First, find the “wallpaper” option in the Settings menu and choose either a provided wallpaper or a photo in your camera roll. After making your selection, you’ll have the option to set it as the wallpaper for your home screen, the lock screen, or both.

It’s all straightforward, but there are a few troublesome tradeoffs. First off, we can’t fathom why the iPhone 3G didn’t get this option. Also, keep in mind that once you ditch the standard black background, there’s no way to get it back. You can take a photo of a black wall, the night sky, or a dark room, but that’s hardly the same thing. And don’t be surprised to find that some of your native wallpapers have been replaced by new options. Apple giveth, and Apple hath taken away.

Camera zoom
You’ll have to wait for the iPhone 4 to get a 5-megapixel shooter, but iOS 4 adds a 5x zoom for the still camera. When taking a photo, just tap the screen to see the zoom bar. Use your finger to pan in and out, but remember that since this is digital zoom, picture quality will degrade as you zoom in.

Spell check
The iPhone has long had an autocorrect feature that changes words as you type, but we’ve never considered it to be completely useful. That’s why we’re bigger fans of the new spell check feature that notifies you of unrecognized or misspelled words with a red underline. It works when you’re composing both e-mails and text messages, and you get a list of suggested corrections. We’d like more suggestions, but that’s a small point.

Tap-to-focus video
On the iPhone 3GS you can use the tap-to-focus feature in the still and video cameras. We’ve never found that this feature makes that much of a difference, but it certainly doesn’t hurt to have it.

Search text messages
You’ll now find a search bar for your text messages. It works just like the search option for emails.

Photo gallery
You can organize all images from an event or those that feature a specific friend. For both, however, you’ll need to have already used the face recognition options in iPhoto or Aperture and sync with iTunes. One expected change appears to have vanished, however: When we played with the initial beta version of iOS 4 we saw an option in the gallery for rotating photos, but we can’t find it again in the final version.

Geolocation
The addition of Geolocations lets you view where you took your latest shots on a map and sort your images by location. This is quite a cool feature, particularly for frequent travelers who like to mark their journeys around the world. But if this isn’t your thing, you can turn off location services in the Settings menu.

Safari search
When typing a URL in the Safari browser, you’ll see not only the URL title of sites you’ve visited recently, but also the full Web address. That’s a nice touch.

Universal search Web and Wikipedia results will now show up in the Universal Search. It takes a couple of clicks to get them going, but it’s convenient.

Playlist
In the iPod player, Apple added an option for creating playlists on the go. We created one in a few steps and added a selection of tunes. What’s more, we’re always happy when we can do something without going through iTunes.

Bluetooth keyboards
We haven’t tested this option yet, but it should be useful for messaging addicts or aspiring novelists.

Birthday calendar
You can keep track of upcoming birthdays with a designated calendar. It’s accessible directly from the main calendar option.

Other minor changes
You’ll also see a host of other usability and interface tweaks. We haven’t located them all yet, but here’s what we’ve found so far.

• Now that a double tap of the Home button opens the multitasking menu, you can no longer use the control as a shortcut for a designated feature. As such, the option is gone from the Setting menu. A small price to pay for a new feature, we suppose.
• The calculator icon has been resigned. The feature is the same, however.
• You can send apps as gifts.
• Swiping to the far left of the multitasking menu will reveal music player controls and a shortcut for locking the display rotation.
• The location icon in the Google Maps application has changed from a bull’s eye to an arrow.

What remains
We have not tested the remaining major iOS 4 features. Once we get an iPhone 4 later in the week, we will use the new applications and expand this section.

Enterprise
Worker bees will get options like enhanced data protection, mobile device management, wireless app distribution, support for Exchange 2010, and SSL VPN from Juniper and Cisco.

iBooks
Apple’s ebook reader joins Amazon’s Kindle app as an option for bookworms. You will be able to access Apple’s iBookstore to purchase new content, and if you have an iPhone and an iPad, you can read your book on both devices (with just one purchase) and sync your current page. It looked nifty when Jobs offered a demo of iBooks during his WWDC keynote, but we’ll be sure to test it ourselves.

Game Center
Coming “later this year,” Game Center will include features like a social gaming network, the ability to invite friends to games, leaderboards and achievements, and the opportunity for “matchmaking” (setting up two people to play).

Kent German

Design

Though the iPhone 3G and the 3GS models simply tweaked the original handset’s design, iPhone 4 marks a sharp departure from those previous models. Admittedly, we never had a problem with the look of the previous handsets, but we approve of the iPhone 4′s changes. The front and back sides are glass, both surfaces are flat, and a stainless steel border circles the entire phone. Though it’s a tad boxy, it also has a clean, svelte, and unmistakably Apple look. What’s more, we love that the flat back means that the phone no longer wobbles when resting on a table. You can get the iPhone 4 in both black and white, but here again we prefer the former.

So much glass is shiny and beautiful, but we have a couple of concerns. Despite the oleophobic coating on both the front and back sides, the glass attracts smudges by the ton. Also, even though Apple CEO Steve Jobs promises that glass better resists scratches and cracks than plastic, we’ll be watching long-term durability. In initial testing, the iPhone 4 did have a solid, sturdy feel in the hand and it survived a few drops to a carpeted floor. Time will tell, however, how it holds up to heavy use.

At 115.2 x 58.6 x 9.3mm, the iPhone 4 is as tall as the iPhone 3GS, but slightly thinner–25 percent, to be exact–and narrow when measured across its front face. It does feel smaller when compared with its predecessors, but we don’t think that’s a bad thing. Jobs called it the thinnest smartphone around, but since that race changes daily, it may not hold the title for long. When put on the scales it comes in at 137g, which is back to what we had with the first iPhone (both the 3G and 3GS models were slightly lighter). We attribute the extra girth to the bigger battery, so we’re not going to complain. And more to the point, the difference is barely noticeable.

User controls
Other new design elements include a new front-facing VGA camera, a new LED flash with the main camera lens, and a new noise-cancellation microphone on the phone’s top side. Needless to say, we welcome the additions since they represent new functionality (See the Features section for more details). We also don’t mind the new split volume buttons, since they’re a bit easier to grasp than the previous volume rocker.

Above the volume controls is the usual mute switch, which Apple also gave a small makeover. In bigger changes, Apple moved the SIM card slot to the right spine and switched to a Micro-SIM format, just like the iPad. According to Jobs, the Micro-SIM format allows more space for the larger battery. Just keep in mind that you won’t be able to use a standard SIM in the phone.

The remaining exterior elements are largely unchanged. The Home button is in its normal place below the display; the 3.5mm headset jack and power key sit up top next to the aforementioned noise-cancellation microphone; and the 30-pin connector, microphone, and speaker are where they belong on the iPhone 4′s bottom end. Unfortunately, and to no one’s surprise, you still can’t remove the battery.

In the box come the usual accessories like the small wall plug, a USB/30-pin connector cable, and the standard Apple earbuds.

Antenna
The stainless steel border is more than just decorative; it doubles as a new antenna that circles the entire phone, minus three small notches. Seriously, leave it to Apple’s industrial design team to make an antenna pretty. Though Apple has not specifically promised that the new antenna would improve call quality or Wi-Fi reception, its very existence is an indirect admission (and the first that we’ve seen by the company) that data and voice reception have been troublesome and need to be addressed. Though current iPhone users largely blame AT&T for connectivity problems, remember that both a carrier’s network and a phone’s antenna play a part in reception.

Display and interface
Sometimes the best gift is something that you didn’t know you wanted, and that’s definitely the case with the iPhone 4′s display. It features a 940 x 640-pixel (326 pixels per square inch) “Retina Display,” which is four times the resolution of previous iPhone models. What’s more, it uses the same IPS screen that’s found on the iPad with an 800:1 contrast ratio. Though we’ve always thought highly of the current iPhone displays, the company needs to compete with the gorgeous AMOLED screens and TFT displays we’ve seen on many Android phones like the HTC Evo 4G. And that’s exactly what it’s done.

Though “stunning,” “gorgeous,” and “dazzling” are words we usually use to describe high-quality smartphone displays, we’re not sure if they do the iPhone 4 justice. Believe us that everything about this display is fantastic, from the bold colors and graphics to the vividly clear text. You can see it reasonably well in direct light and the details on Web pages, photos, and applications are as sharp as they come. But the best thing is that you can’t see any pixels on the display. It’s quite remarkable and especially apparent when you hold it up next to the 3GS. No, we’re not inclined to completely believe Apple’s claim that the display exceeds what’s perceivable by the human eye, but there’s no denying that it looks good.

Of course, the iPhone 4 has the same ambient light sensor, proximity sensor, and accelerometer as the previous iPhones. We saw no change in their functionality.

Features

With a heavy load of new goodies, the iPhone 4 runs circles around its 3GS predecessor in bringing new features. Some are unique to the device, and others come with the iOS 4 update. We’ll cover the latter group first.

Multitasking
Though you’ve always been able to multitask with native iPhone features like the music player, the option is now available for third-party apps. Your primary access point is a multitasking menu that’s accessible by double-tapping the Home button. Once there, you’ll see a list of currently running applications along the bottom of the display that you can scroll through using a sideways finger swipe. The pop-up menu shows only four apps at a time, but you can keep many more in the tray.

Managing the multitasking menu couldn’t be easier. To open a running app, scroll though the menu and tap its icon once. When you’re ready to end an app, first use a long press on the related icon and then click the tiny delete icon in the top left corner. Switching among apps is a simple process as well: As you move back and forth, you’ll return to the exact point you left. There’s also a clear sense of organizations with the most recently used app on the left side. All things considered, it’s a very Apple experience.

But is it real? As you’d expect, Apple’s multitasking works a little differently than on other smartphones. Instead of having all device resources available to every running app, iOS 4 lets only seven app services run in the background. According to Apple, this arrangement will have less of a drain on resources like battery life and memory than if it gave developers free rein. Also, since background apps essentially pause, it will free the system from having to juggle resources and kill stalled applications.

So what can you do in the background? Apple’s seven approved processes include audio (you’ll be able to play Pandora radio, for example), VoIP services like Skype, GPS/location for apps like TomTom, push notifications, and local notifications (those that don’t to have to go through a server), task completion, and fast app switching (apps essentially hibernate not to use the CPU). The latter two are most notable. With task completion, an app will finish something it’s already started even if you send it to the background; it will send you an alert when it’s through. Fast app switching, on the other hand, is the app hibernation process that allows you to toggle back and forth quickly and return to the same place you left.

Though some have complained that the built-in limitations mean that iOS 4 doesn’t have “real” multitasking, we think “incomplete” is a better description. Granted, you can’t run everything in the background–your Twitter feed, for example, won’t update while paused–but iOS 4 does allow you to run certain features from multiple apps simultaneously. If that isn’t multitasking, then we don’t know what is. What’s more, it wouldn’t be the first time Apple limited features or took longer with development in order to produce a desired customer experience. You may not agree with such a philosophy, but Apple has always been honest about pursuing it. Like so many things in technology, it just comes down to what works best for you.

Nice, but not miles ahead
Even after the long wait we’re quite pleased with the multitasking experience. As it has a talent for doing, Apple has presented the feature in a slick, easy-to-use manner. It performed beautifully without ever crashing or freezing the phone; it didn’t appear to negatively affect battery life; and it accomplishes what it sets out do. But even with strong points, we wouldn’t agree that it’s the “the best” way to multitask (a common Apple claim). It may be slick and save you a few clicks, but other approaches–such as the “deck of cards” interface on webOS–continue to impress. Similarly, though limited multitasking may result in more-efficient power management, we’ll have to run comparison testing with other smartphones before we can agree.

We also don’t share Jobs’ view that Apple’s solution isn’t a task manager. When he unveiled iOS 4 last April, Jobs took a dig at Android and other operating systems that require you to close background applications that might be slowing down the phone. “In multitasking, if you see a task manager… they blew it,” he said. “Users shouldn’t ever have to think about it.” Fair enough, but we think it’s a matter of semantics. As with most task managers, the iOS 4 multitasking menu allows you to scan through running applications and close any that you’re no longer using.

Granted, you may not have to kill frozen applications as often as you would on, say, a Windows Mobile phone, but you still have that option. We also found usability quirks that are common with task manager apps. Pressing the Home button once, for example, simply sends an app to the background; it does not end it completely. To do so, you’ll need to open the multitasking menu, find the related icon, and end it there. And we couldn’t overlook another point. Now that a double-tap of the Home button opens the multitasking menu, you can no longer use the control as a shortcut for a designated feature. As such, the option is gone from the Setting menu. A small price to pay for a new feature, we suppose.

Apps will come
We know that some users are concerned that many existing apps are not functioning in the background. Keep in mind that it will take time for developers to update their apps for multitasking capability. Apple plays no rule in making those updates, so contact the individual developers for a time frame.

Home screen folders
Though we love apps as much as the next person, we’ve become tired of scrolling through several pages of iPhone home screens. Thankfully, that has changed with the addition of home screen folders. This is another common feature that competing devices have long offered, so it’s nice to see Apple stepping up.

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Other email changes include the capability to add multiple Exchange accounts, organize emails by thread, jump directly to individual inboxes, resize photos before you send, and open attachments with a preferred app. All are nice, but we’ll delve into a couple of our favorites for more detail. Emails in a thread will now be designated by a small number on the left side of the message header. Clicking the number will take you to a separate screen that lists all relevant messages. It’s a nice touch, and we like that you can move or delete messages in the thread. We also like the new option to delete emails directly from search results.

Worker bees will get options like enhanced data protection, mobile device management, wireless app distribution, support for Exchange 2010, and SSL VPN from Juniper and Cisco.

Home screen customization
Unlike the previous three features, this addition was low on our wish list, but Apple’s done a decent job rolling it out. Sure, you always could change the standard black background using a third-party app, but iOS 4 adds the native capability to the iPhone and iPod touch. First, find the “wallpaper” option in the Settings menu and choose either a provided wallpaper or a photo in your camera roll. After making your selection, you’ll have the option to set it as the wallpaper for your home screen, the lock screen, or both.

It’s all straightforward, but there are a couple troublesome trade-offs. First off, keep in mind that once you ditch the standard black background, there’s no way to get it back. You can take a photo of a black wall, the night sky, or a dark room, but that’s hardly the same thing. And don’t be surprised to find that some of your native wallpapers have been replaced by new options. Apple giveth, and Apple hath taken away.

Spell check
The iPhone has long had an autocorrect feature that changes words as you type, but we’ve never considered it to be completely useful. That’s why we’re bigger fans of the new spell check feature that notifies you of unrecognized or misspelled words with a red underline. It works when you’re composing both emails and text messages, and you get a list of suggested corrections. We’d like more suggestions, but that’s a small point.

Search
iOS 4 offers a few new searching options across various features. First off, when typing a URL in the Safari browser, you’ll see not only the URL title of sites you’ve visited recently, but also the full Web address. That’s a nice touch since you can find the exact Web page that you want. Over in Universal Search, you’ll see Web and Wikipedia results with the content stored on the phone. It takes a couple of clicks to get them going, but it’s convenient. And finally, you’ll now find a search bar for your text messages. It works just like the search option for emails.

Game Center
Coming “later this year,” Game Center will include features like a social gaming network, the ability to invite friends to games, leaderboards and achievements, and the opportunity for “matchmaking” (setting up two people to play).

Connectivity
iOS 4 adds persistent W-Fi, which means the iPhone 4 will stay connected to a hot spot even when it’s in standby mode. This could have a negative effect on battery life so we’ll be watching. With wake-on wireless, the handset promises to wake from standby when it comes in range of a cellular network. It’s not something we were asking for, but we’ll take it. Lastly, there’s now support for using a Bluetooth keyboard. We haven’t had the opportunity to test this feature yet.

Additional changes
As with previous updates, iOS 4 also brings a selection of smaller features and interface tweaks. Among them are a redesigned calculator icon (the feature is the same), the ability to send apps as gifts, alphanumeric pass codes, bigger font sizes for accessibility, enhanced iPod-out capability, and a redesigned location icon in the Google Maps application (it’s an arrow instead of a bull’s eye). You also get a new Birthday Calendar that’s accessible under the main calendar app. We’re still looking for a specific birthday event filed, however.

iPod player
With the iPhone 4, Apple continues to show that it positively shines with mobile music and video. This is one area where the company beat its competitors hands down. For the most part, the iPhone 4 iPod player is unchanged, but we were glad to see a few new offerings. There’s now a convenient option for creating playlists on the go. We did so in just a couple of steps and added a selection of tunes. What’s more, we’re always happy when we can do something without going through iTunes. Back in the multitasking menu, you’ll find new music player controls and a shortcut for locking the display rotation. To get there, just swipe to the far left.

Camera
The iPhone’s camera has always been decent, but it’s lacked features found on many basic phones. That’s why we applaud the 5-megapixel resolution, the new LED flash, and the 5x digital zoom. The handset also has a new backside illuminated sensor, which requires a more-detailed explanation. The biggest gain, however, is its ability to record 720p high-definition video at a constant 30 frames per second. The iPhone isn’t the first handset to offer this capability, but it delivers on quality. Of course, we’d love more options like a brightness control and color tones, but we doubt that we’ll ever get them.

The primary camera interface is about the same as the 3GS’, with the usual shutter control, camera/camcorder switch, and photo gallery shortcut off to one side. A new flash control activates the LED on the rear face. Thankfully, you can choose form auto or “always-on” modes. Over in the opposite corner is a control for switching between the front and rear cameras. When you’re not making FaceTime calls, you can use the front-facing VGA camera for self-portraits. Image quality won’t amaze, but that’s not surprising considering VGA shooters are hardly the pinnacle of technological development. It is great to be able to take vanity shots, though.

The shooter also includes changes that came from iOS 4. Our favorite is a 5x zoom for the still camera. When taking a photo, just tap the screen to see the zoom bar. Use your finger to pan in and out, but remember that since this is digital zoom, picture quality will degrade as you zoom in. Also, you now can use the tap-to-focus feature in the still and video cameras. We’ve never found that this feature makes that much of a difference, but it certainly doesn’t hurt to have it.

In initial testing the camera quality is noticeably improved. We’ll start with still photos first. It’s not an exaggeration to say that iPhone 4 takes beautiful photos. Colors are bright and natural, there was no visible image noise, and our shots were in focus. The bright flash also makes a positive change. As with most LEDs it can make dark images look a tad overblown, but we’re just glad that we now can take images in a dark room. We also love that there’s no shutter lag like there was with previous iPhones. The camera takes the shot the instant you press the shutter.

Video quality also impressed. You’ll need to keep the phone steady, but our clips were smooth and free of any pixels or hiccups. It also handles motion quite well, and audio was in sync with the video. And of course, you can cut your videos using the nifty video-editing feature that originated on the iPhone 3GS. Those are our preliminary impressions, but we’ll add to this section as we spend more time with the camera.

Photo gallery
You can organize all images from an event or those that feature a specific friend. For both, however, you’ll need to have already used the face-recognition options in iPhoto or Aperture and sync with iTunes. One expected change appears to have vanished, however: when we played with the initial beta version of iOS 4, we saw an option in the gallery for rotating photos, but we can’t find it again in the final version.

FaceTime
Apple is pushing FaceTime as one of the iPhone 4′s most-exciting features. It certainly looked good at the WWDC demo, so we were eager to try it. After even a short test we were pleased with the feature’s quality and we like that it’s an integrated option that doesn’t require an app. The incoming video can be a bit pixelated and jerky, particularly when your friend is using the front camera, but it wasn’t bothersome. And really, that’s to be expected when using a VGA shooter. You’ll see a slightly better feed if your friend uses the rear camera, but not by much. The video from your phone will show in the lop left corner; it looked great from either camera. Also, you can use it in both portrait and landscape modes.

Obviously, FaceTime only works with another iPhone 4. You activate the feature after placing a call on a Wi-Fi network (more on that in a minute). Once the call connects, you’ll see an option for FaceTime instead of the normal “Hold” control (we’ve no clue where that option went). Both you and your friend must press the control to establish a video chat; you then can mute the call or end it directly from the FaceTime screen. And after you placed a FaceTime call for the first time, you’ll see the phone number listed twice in your recent calls list. One entry will activate FaceTime directly, and the other will place a normal cellular call.

That’s not to say FaceTime wasn’t without its problems. On more than one occasion, we couldn’t establish a connection, even though we were using two iPhone 4s on Wi-Fi. We even found on one handset that the FaceTime option wasn’t there when it should have been. The switch between normal and FaceTime calls can take a few seconds, during which reception is faulty. We never dropped a call during the switch, but it was annoying.

For 2010, FaceTime will work only on Wi-Fi. We’ve heard a lot of grumbling about this restriction, but we don’t think that’s a bad thing. Video chat uses a ton of data so we’re sure the experience would be better on Wi-Fi than on AT&T’s strained network, anyway. What’s also great is that because you’re on Wi-Fi, FaceTime calls will not deduct from your cellular minutes. Jobs said Apple is working with iPhone carriers to carry the feature (cue speculation on possible new carriers), but he didn’t offer other details. As long as Apple kills the Wi-Fi limit in the next year, we’ll be happy.

As fun as it is, though, it’s not a feature that we were burning for, and we wonder if it will last past the novelty stage. This is not a reflection on the quality of Apple technology–so back off, fanboys–but rather on if users will really use it over the long term. After all, video chat technology has been around since 2004 when AT&T Wireless (remember that?) first debuted a very limited service on the brick-size Motorola A845. The phone didn’t last long, but video chat is common around the world and in the United States. AT&T runs its Video Share on a limited number of phones, for example, and Sprint’s HTC Evo 4G offers the Qik video chat application. Each has a few drawbacks, but they do exist.

Yet, Apple has a talent for repackaging existing features and attracting wide consumer interest. Outside of other VoIP services like the Skype app, carriers have been unsuccessful at making video-calling services popular and useful. FaceTime will face competition from other devices, but Apple could very well make it work.

Gyroscope
The iPhone 3Gs gave us a compass, but the iPhone 4 raises the bar by offering a three-axis gyroscope. Like on an airplane, you’ll get pitch, roll, and yaw, and it’s tied with the accelerometer to provide six-axis motion sensing. Though by all means it will be useful to app and game developers, it also just looks like a lot of fun. We’ll investigate this more over the next few days.

Tethering
The iPhone has always been capable of tethering, but AT&T has lagged behind other carriers in offering an option for it. In its new pricing plans, however, AT&T now offers the ability to use your iPhone as a modem for your PC. You’ll need to pay an extra US$20 to get it, but at east it’s there. We’ll test this feature and report back.

iMovie and iBooks
iMovie brings movie-editing capabilities to the iPhone. You’ll pay US$4.99 for the app, but it’s a nice touch. We’ll explore its capabilities after we can test it thoroughly. Apple’s e-book reader joins Amazon’s Kindle app as an option for bookworms. You will be able to access Apple’s iBookstore to purchase new content, and if you have an iPhone and an iPad, you can read your book on both devices (with just one purchase) and sync your current page. It looked nifty when Jobs offered a demo of iBooks during his WWDC keynote.

Processor
Under the hood is the same 1GHz ARM Cortex A8 chip that’s found in the iPad. Also, though Apple hasn’t specified the RAM, we know that it’s 512MB. In early tests the phone is quite a bit faster than the 3GS and certainly the iPhone 3G. Menus, applications, and other features opened in a flash. And as we mentioned earlier, the app switching in the multitasking menu and the camera shutter didn’t leave us waiting.

Performance

Call and data quality
Much has been said about problems with AT&T and the iPhone, and even on the iPhone 4 call quality remains the biggest sticking point. Indeed, when we tested the quad-band (GSM 850/900/1,800/1,900) world phone in San Francisco, we encountered mixed results, with improvements in some areas and no change in others. On the upside, audio clarity was sharper, our friends’ voices sounded natural, and the volume was a tad louder than on previous iPhones. Also, from what we can tell, the noise-cancellation mic does a good job of screening out background audio. Even when in a loud place we could continue with our conversations without any problem. What’s more, we heard no “side noise” (the sound of our own voice coming back through the phone), static, or interference. Perhaps that antenna made a difference.

But then again, perhaps it didn’t. Call quality was improved only when we could get signal, but finding–and keeping–a strong connection continues to be a challenge. In the first few moments of testing the device, we had a dropped call, even though we had full bars. We also had a couple of calls that failed to connect in an area where we knew that AT&T reception is good. And when we were in known AT&T dead zones, we had no luck at all.

There’s even a chance that the antenna could be doing harm. Soon after we posted this review, we heard from many users who complained that when they held the phone in the hand–a common occurrence, no doubt–the signal degraded within a few seconds. The reports came mostly from people who covered the notch on the phone’s right side with their fingers while holding it in their left hand. We had mixed results in replicating this problem, though our experience varied widely by location, the phone we were using, and the person using it. At times we saw no difference, but other times we noticed the signal drop from a full five bars down to two or three. When we moved our hand away, the meter jumped back to normal. We’ve asked Apple about the issue, but the company has not responded. Some have suggested that the rubber and plastic bumper cases that Apple is selling with the iPhone 4 solve the problem because they prevent fingers from touching the antenna. Though we’ll scream highway robbery about the bumper’s US$29 price tag, we’re not prone to conspiracy theories. On the other hand, we did get a selection of bumpers with our review phone. Hmmm.

Though our experience is somewhat worrisome, we’re not ready to demand a recall. As we said, the problem appears to be intermittent. Also, issues with a new device, particularly something as hyped as the iPhone 4, are common after it comes out. We saw similar problems in 2008 when the iPhone 3G first went on sale and complaints about poor reception flooded in. In that instance, though, the problem was fixed after a software update. Honestly, we have a hard time accepting that Apple didn’t catch this in the testing process, but we’ll continue to watch the issue and test the phone in more places.

What’s more, the iPhone 4 still appears to have a problem with hand-offs between EDGE and the 3G network; the handset still tries to hang on to weak 3G signal when it should switch to EDGE. As we said with the iPhone 3GS, the reception jumped if we switched off the handset’s 3G radio on the Settings menu. Constantly doing that, however, can be a pain.

On their end, callers said we sounded good; a few people didn’t know we were on a cell phone. During active calls, they could hear us without any problems and they mentioned less background noise than when we used the 3GS. The first iPhone had a sensitive sweet spot, but we didn’t notice that here. A few people heard some interference, but they said it was manageable. Automated calling systems could understand us most of the time, even if we were on a busy street.

Speakerphone calls were mostly satisfactory. We could hear our friends clearly, though the volume was a tad distorted at the highest levels. You don’t need to be close to the phone to hear, but we had to be close to the phone for our friends to hear us. That’s not unusual, though. Bluetooth headset performance was mixed. Bluetooth headset calls were fine, but we had mixed issued with stereo Bluetooth headsets.

The quality of the data connection was similar to voice calls. When we had a strong 3G signal, the busiest pages loaded in a few seconds and the connection held strong. EDGE browsing is a bit painful, so we suggest using it rarely. Also, when contrasted with comparable smartphones from Verizon Wireless and T-Mobile, we still find that AT&T’s 3G isn’t as reliable.

Battery life
The iPhone 4′s bigger battery should mean more juice to get you through the day. Apple now officially promises 7 hours of talk time, 6 hours of 3G browsing, 10 hours of Wi-Fi browsing, and 300 hours of standby. In very early testing, the battery lasted a respectable period. We used it heavily for about 5 hours and we were still going relatively strong after a full charge.

By Kent German